The CEO of Manor Lords publisher Hooded Horse, Tim Bender, has detailed his company’s approach to developer contracts, saying that the way most legal agreements in the space are written “violate a lot of principles of what’s an efficient contract”.

Speaking to PC Gamer, the chief executive and founder argued that the way many publishing contracts are drawn up is unfair to developers, saying that there is an uneven distribution of risk.

“The ways in which [game] publishing contracts are generally written violate a lot of principles of what’s an efficient contract,” he said, adding that when he was training to be a lawyer, he was taught that “there are principles involved in how contracts should be done that help everyone”.

He continued: “One of the principles is that risk should be borne by the party best able to bear that risk.”

Hooded Horse’s ‘standard’ contract with the developers it partners with gives 65% of revenue to the studio. The publisher does say it takes a larger slice of the pie if it has partially funded the game. It also has no recoup, meaning that it isn’t the first in line to take back the money it has spent from revenue.

Bender added that publishers recouping their costs, as is often the case with such agreements, is “fundamentally stupid”.

“There’s a lot of games that come out, maybe they had a little bit of rough launch, but could have recovered, or maybe they had a fine launch, but it wasn’t good enough to overcome some giant recoup term where the publisher was taking all their money back first,” he said.

“If only that hadn’t been there, they could have been supported.”

He continued: “No publisher out there is making its money from recouping and dragging every last dollar out of things that underperform. Publishers make their money on the games that go well. If you don’t have these recoup terms, there’s more chances those other games go well. The developers are better incentivised, better able to create things. Everyone’s better off.”

Last year, Bender said that Hooded Horse would not work with studios using generative AI, going on to describe the technology as “cancerous”.